Accenture Plc's fourth-quarter earnings missed estimates and the technology firm expects two more quarters of low growth, indicating that the disruption from the Covid-19 pandemic will last longer even as demand for digital services rises.
Revenue in the three months ended August fell 2% over the previous quarter to $10.84 billion, according to the consulting and tech firm's filings. Analysts expected $10.93 billion.
Revenue from consulting fell 8% sequentially to $5.68 billion.
Outsourcing revenue rose 6% in dollar terms and 7% in local currency to $5.15 billion.
The company hopes to return to its pre-covid-19 growth rates—single digits or low double digits—in the second half of fiscal 2021, KC McClure, chief financial officer at Accenture, said. She expects growth to be lower in the first half (September 2020 to February 2021).
That suggests software services providers and consultants are unlikely to see a full rebound early even though digital services led the business during the lockdowns as employees and students logged in remotely.
For the first quarter ending November, Accenture sees revenue between $11.15 billion and $11.55 billion. The Covid-19 crisis “has created a significant amount of volatility, uncertainty and economic disruption”, it said.
Accenture expects revenue growth of 2% to 5% in local currency, including a reduction of about 1 percentage point because of reimbursable travel costs in fiscal 2021. It expects the operating margin for the full fiscal in the range of 14.8% to 15.0%, an expansion of 10 to 30 basis points over the previous year.
“As we turn the page to fiscal 2021, we are better positioned than ever to continue gaining market share and delivering tangible value for our clients and shared success for all our stakeholders,” Julie Sweet, Accenture's chief executive officer, said. The company derives 70% of its revenue from digital solutions and need for these services has accelerated dramatically as result of Covid-19, she said.
The company's stock fell more than 5% after the earnings even as the NYSE benchmark index was trading almost unchanged.
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